Rupee rises 61 paise to 86.84 against US dollar in early trade

Mumbai, Feb 11 (PTI) The rupee gained 61 paise to 86.84 against the US dollar in early trade on Tuesday, after nearing closer to 88-level on Monday, amid high volatility as heightened trade war fears have created widespread economic uncertainty, significantly impacting global currency markets.

The sharp depreciation in the rupee was driven primarily by the threats of reciprocal tariffs and additional protectionist measures that have strained global supply chains, deepening concerns over prolonged economic disruption, forex traders said.

At the interbank foreign exchange, the rupee opened at 87.45 against the greenback, then touched 86.84 against the American currency in morning trade, registering a rise of 61 paise from its previous close.

On Monday, the rupee plunged 45 paise and moved closer to the 88 per US dollar level, weighed down by the strength of the American currency tariff concerns, but eventually settled at 87.45, up 5 paise, following RBI intervention.

"As USD/INR neared 88, the RBI intervened, leveraging its USD 630 billion reserves and 10-month import cover. It sold USD 2–3 billion to curb volatility, stabilizing the rupee and reinforcing market confidence," CR Forex Advisors MD Amit Pabari said.

Pabari further noted that the rupee is expected to trade at elevated levels 87.95-88.20 in the near term, with 87.20-87.40 acting as a key support level. "A close below 87.00 level will be the first indication of a trend reversal," he said.

Meanwhile, the US dollar index surged to 108.40, driven by escalating trade tensions following the imposition of 25 per cent tariffs on aluminium and steel.

The dollar index, which gauges the greenback's strength against a basket of six currencies, was trading 0.11 per cent higher at 108.44.

Brent crude, the global oil benchmark, rose 0.25 per cent to USD 76.06 per barrel in futures trade.

In the domestic equity market, the 30-share BSE Sensex was trading 199.89 points, or 0.26 per cent, lower at 77,111.91 points, while the Nifty was down 73.10 points, or 0.31 per cent, at 23,308.50 points.

Foreign institutional investors (FIIs) offloaded equities worth Rs 2,463.72 crore in the capital markets on a net basis on Monday, according to exchange data. PTI DRR DR

Source: PTI